Shares of Neste advanced by over 3% following an upgrade from Barclays, which moved the stock from "equal weight" to "overweight" on Tuesday. The broker highlighted what it termed improved operational delivery under new management and a materially stronger earnings profile for 2026.
Barclays raised its price target on Neste to €32 from €17, pointing to what it described as a "credible operational turnaround". The bank noted that €376 million in cost savings were delivered a year earlier than planned and said those savings will contribute to financial benefits expected in 2026.
On margins, Barclays set out specific forecasts for the first quarter. It estimated renewable products margin at $707/bl compared with consensus at $637/t, and projected oil products margin at $22/bl versus a consensus view of $14.6/t. The bank characterized those margin levels as comparable only to results seen in 2023 or earlier.
Barclays’ model produced a notably higher near-term earnings picture than consensus. The brokerage put group comparable EBITDA for the first quarter at €902 million, about 55% above the €581 million consensus. For the full year 2026 it forecast EBITDA of €2.87 billion versus a consensus of €2.23 billion.
Earnings per share forecasts in Barclays’ report were also elevated relative to market expectations. The bank projected €0.63 per share for the first quarter compared with consensus of €0.33, and €1.74 for 2026 versus a consensus of €1.16.
Barclays attributed part of the margin strength to external market drivers. The brokerage said refining margins are supported by supply disruptions, geopolitical factors and seasonal demand, and it expects these forces to help keep margins elevated through 2026.
The bank also expects demand-side tightening in renewable diesel markets. It forecast global renewable diesel demand to grow +35%, equivalent to 6.8 million tonnes year-on-year in 2026, and cited regulatory developments in Germany and the United States as key demand drivers that will tighten the supply-demand balance.
On input costs, Barclays noted that feedstock costs have risen by less than 5% quarter-on-quarter, which it said helps sustain margins despite ongoing crude price volatility.
Looking at broader profitability and cash generation, Barclays projected adjusted operating profit to rise to €1.93 billion in 2026 from €748 million in 2025. Adjusted EBITDA was forecast at €2.87 billion versus €1.68 billion, and net income at €1.34 billion compared with €307 million.
Cash flow projections in the report showed improvements into 2026 as well. Barclays forecast cash flow from operations of €2.36 billion in 2026, up from €1.74 billion in 2025, and expected equity free cash flow of €1.26 billion, up from €821 million.
On near-term uncertainties the bank warned that margin volatility remains a concern beyond 2026. "While margin uncertainty is still elevated in 2027, we see further upside momentum, at least for 2026," Barclays said.
Contextual summary
Barclays’ upgrade and higher price target reflect stronger operational performance, earlier-than-expected cost savings and a set of bullish 2026 forecasts for margins, EBITDA, earnings and cash flow. The brokerage expects demand growth in renewable diesel and persistent refining-supportive conditions to underwrite improved profitability next year.